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CIAO DATE: 04/05/07
The Economic Obstacles to Democratization
by Joseph Siegle
We live in a historic era of democratic expansion. More than half of the states that were authoritarian twenty-five years ago have since moved toward democracy. Yet, the democratic road is often bumpy. Of the roughly 100 countries that have started down this path since the mid-1970s, nearly half have experienced at least one episode of backsliding. Seventy percent of these cases occurred during a period of economic stagnation.1 This pattern has fueled concerns that democratization in poor countries may be incompatible with economic development. For many, Latin America epitomizes the apparent tradeoff. The well-worn lament is that, although all of Latin America, save Cuba, has moved toward democracy and pursued free-market reforms, living conditions in the region are worse today than they were fifteen years ago.
The stakes for understanding the economic challenges facing democratic transitions are high. If transitioning states cannot sustain economic development or the strains of economic reform prove so great that the democratic process collapses, then the historic democratic gains we have observed are illusory. Such a conclusion has far-reaching implications for how vigorously industrialized democracies should support democratization around the world.
To begin, let's put this phenomenon in context. Despite the disruptions involved in reshaping the institutions of political power, democratization is not inherently associated with poorer social and economic conditions. Since 1977 newly transitioned states have averaged per capita growth rates that are 20 percent higher than their autocratic counterparts at comparable income levels.2 Even stronger divergences are observed in indicators of social progress. Since the end of the Cold War, democratizers have, on average, posted infant mortality rates that are 20 percent lower, life expectancies that are nine years longer, and access to safe drinking water and primary school completion that are 15 percent greater than countries that have not attempted to reform politically.3
One might assume that democratizers' superior development performance may be attributed to populist policies they feel compelled to pursue, which lead to ever more dire macroeconomic straits down the line. This is not the case. Democratizing states have achieved their positive developmental record without spending proportionally more on their health and education sectors than autocracies. Nor do they incur higher fiscal deficits or debt loads. As such, the economic challenges that threaten democratizers cannot, by and large, be attributed to the excesses of overly generous social programs.
Joseph Siegle is Associate Director of the Center for Institutional Reform and the Informal Sector at the University of Maryland. He is co-author of The Democracy Advantage: How Democracies Promote Properity and Peace (2004).